{"id":122908,"date":"2010-06-14T00:00:00","date_gmt":"2010-06-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/gujarat-vs-state-on-14-june-2010-3"},"modified":"2016-11-28T13:04:31","modified_gmt":"2016-11-28T07:34:31","slug":"gujarat-vs-state-on-14-june-2010-3","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/gujarat-vs-state-on-14-june-2010-3","title":{"rendered":"Gujarat vs State on 14 June, 2010"},"content":{"rendered":"
Gujarat High Court<\/div>\n
Gujarat vs State on 14 June, 2010<\/div>\n
Author: K.A.Puj,&Nbsp;<\/div>\n
   Gujarat High Court Case Information System \n\n  \n  \n    \n\n \n \n    \t      \n         \n\t    \n\t\t   Print\n\t\t\t\t          \n\n  \n\n\n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t\n\n\n \n\n\n\t \n\nSCA\/6896\/1993\t 51\/ 53\tJUDGMENT \n \n \n\n\t\n\n \n\nIN\nTHE HIGH COURT OF GUJARAT AT AHMEDABAD\n \n\n \n\n\n \n\nSPECIAL\nCIVIL APPLICATION No. 6896 of 1993\n \n\nWith\n\n\n \n\nSPECIAL\nCIVIL APPLICATION No. 13969 of 1993\n \n\n \nFor\nApproval and Signature:  \n \nHONOURABLE\nMR.JUSTICE K.A.PUJ\n \n \n=========================================================\n<\/pre>\n
1<\/span><\/p>\n
Whether
\n\t\t\tReporters of Local Papers may be allowed to see the judgment ?\n<\/p>\n
2<\/span><\/p>\n
To be
\n\t\t\treferred to the Reporter or not ?\n<\/p>\n
3<\/span><\/p>\n
Whether
\n\t\t\ttheir Lordships wish to see the fair copy of the judgment ?\n<\/p>\n
4<\/span><\/p>\n
Whether
\n\t\t\tthis case involves a substantial question of law as to the
\n\t\t\tinterpretation of the constitution of India, 1950 or any order
\n\t\t\tmade thereunder ?\n<\/p>\n
5<\/span><\/p>\n
Whether
\n\t\t\tit is to be circulated to the civil judge ?\n<\/p>\n
=========================================================<\/p>\n
GUJARAT
\nHOTELS LIMITED & 3 – Petitioner(s)<\/p>\n
Versus<\/p>\n
STATE
\nOF GUJARAT & 5 – Respondent(s)<\/p>\n
=========================================================<\/p>\n
Appearance
\n:\n<\/p>\n
MR
\nSN SHELAT, LD SR. ADVOCATE with MR AS ASTHAVADI
\nfor
\nPetitioner(s) : 1 – 4.\n<\/p>\n
MR PK JANI, GOVERNMENT PLEADER for
\nRespondent(s) : 1 – 3,5 – 6.\n<\/p>\n
RULE SERVED for Respondent(s) :\n<\/p>\n
4,
\n=========================================================<\/p>\n
CORAM
\n\t\t\t:\n<\/p>\n
HONOURABLE
\n\t\t\tMR.JUSTICE K.A.PUJ<\/p>\n
Date
\n: 14\/06\/2010
\n CAV JUDGMENT <\/p>\n
\tSince common issue is
\n\tinvolved in both these petitions and since they are heard together,
\n\tthe same are being disposed of by this common judgment and order.\n<\/p>\n
\tSpecial Civil Application
\n\tNo.6896 of 1993 is filed by the petitioners praying for striking out
\n\tand quashing the impugned Resolution dated 8.6.1993 (Annexure-E) and
\n\timpugned letters of demand dated 23.6.1993, 24.6.1993 and 8.7.1994
\n\t(Annexure-G) collectively. The petitioners have also prayed for the
\n\tdirection to the respondents to grant to the petitioner Nos.1 and 3
\n\tCompanies the benefits and concessions contained and set out in the
\n\tminutes of the meeting dated 4.10.1990 and the Resolution dated
\n\t22.3.1991 and 10.9.1992 (Annexure   A, B and C respectively). The
\n\tpetitioners have alternatively prayed for the directions to the
\n\tState Government to honour commitment and promise as made vide its
\n\tResolution dated 22.3.1991 and 10.9.1992 to grant concession of
\n\tRs.278 lacs by way of differed payment of luxury-tax, purchase tax,
\n\tsales-tax and electricity duty for four years from 1991-92 to
\n\t1994-95 without interest.\n<\/p>\n
\tSpecial Civil Application
\n\tNo.6896 of 1993 was admitted and rule was issued by this Court on
\n\t5.8.1993.  This Court has passed a detailed order while refusing to
\n\tgrant interim relief. The Court in concluding paragraph has observed
\n\tthat the petitioner Company has received the amount of tax from its
\n\tcustomer for and on behalf of the State Government and seeks to
\n\tprevent the government from releasing the said amount which is even
\n\totherwise payable to the State Government under the Act. The Court,
\n\ttherefore, took the view that this is not a fit case in which
\n\tinterim relief should be granted in favour of the petitioners. There
\n\twould not be miscarriage of justice if interim relief was refused.
\n\tOn the contrary, granting of interim relief would amount to abuse of
\n\tprocess of Court and hence interim relief was refused. This order
\n\twas challenged by the petitioners before the Division Bench of this
\n\tCourt in Letters Patent Appeal No.30 of 1994. The Appeal was
\n\tdisposed of by the Court on 2.2.1994. While disposing of the said
\n\tAppeal the Court observed that it is not disputed that a Resolution
\n\twas passed by the Government by way of a package deal, whereby
\n\tpayment of luxury tax by the appellants, to the respondents was
\n\tdeferred by four years. This meant that the appellants could collect
\n\ttax from the customers, but would not be obliged to pay to the
\n\tGovernment for a period of four years. This concession was given in
\n\torder to rehabilitate the sick unit and because of this, one of the
\n\tmajor shareholders of the Company invested, approximately
\n\tRs.1,24,00,000\/-. The Court further observed that under the Gujarat
\n\tTax on Luxury (Hotels and Lodging Houses) Act, 1977 such deferment
\n\tcould not have been granted and, therefore, principles of promissory
\n\testoppel are not applicable. Without expressing any final opinion,
\n\tprima facie, it appears to the Court that under proviso to Section-8
\n\ttime for payment of tax already realised could be extended.
\n\tTherefore, the action of the State Government in deferring payment
\n\twould not be contrary to law. In this view of the matter, the Court
\n\tstayed the realisation of the demand by the respondents. The Court,
\n\thowever, made it clear that the appellants shall be bound by the
\n\tterms of the Government Resolution, whereby the payment was deferred
\n\tby only four years. The Court, therefore, continued interim relief
\n\ttill disposal of the Special Civil Application and liberty was
\n\tgranted to the parties to approach the Single Judge for expeditious
\n\thearing. The Court further made it clear that the question regarding
\n\tpayment of interest, if any, would arise on the disposal of the
\n\tSpecial Civil Application.\n<\/p>\n
\tThe petition is now to be
\n\ttaken up for hearing in light of the above observations of the
\n\tDivision Bench.\n<\/p>\n
\tSpecial Civil Application
\n\tNo.13969 of 1993 was admitted and Rule was issued on 5.8.1994.
\n\tInterim relief granted earlier was ordered to be continued till
\n\tfurther order.\n<\/p>\n
\tBrief facts giving rise
\n\tto the present petition are that Gujarat Industrial Investment
\n\tCorporation formed a Company on 7.8.1982, namely, Gujarat Hotels
\n\tLtd., to promote tourism. It started searching for a promoter.
\n\tInitially it was a wholly own subsidiary of  Gujarat Industrial
\n\tInvestment Corporation.  The  Gujarat Industrial Investment
\n\tCorporation thereafter signed shareholders agreement on 18.1.1984
\n\twith ITC and agreed to pay 26% equity in the Company. The ITC agreed
\n\tto take 25% and the remaining 49% was to be offered to public. The
\n\tduration of agreement was 15 years. The Gujarat Industrial
\n\tInvestment Corporation wanted to promote tourism in the State and to
\n\tbuild up hotels at various places. The ITC had expertise for
\n\trunning, constructing and managing hotels of first quality through
\n\tout India. A supplementary shareholders agreement was executed on
\n\t1.8.1985. The share holding patern was changed and ITC held 24.9%
\n\tshares whereas GIIC held 26.1% shares.\n<\/p>\n
\tThe petitioner Company,
\n\tnamely, Gujarat Hotels Ltd., thereafter took land on sub-lease and
\n\tstarted up a hotel at Vadodara. It raised term loan of Rs.303 lacs
\n\tfrom Financial Institutions like IFCI and SBI.  ITC had brought in
\n\tRs.78 lacs by way of unsecured loans. The hotel was commissioned
\n\tduring the year 1986-87.  The Gujarat Hotels Ltd., however started
\n\tincurring losses due to high rate of luxury tax and high electricity
\n\ttariff in the State and low occupancy. GHL’s accumulated losses was
\n\tof Rs.304 lacs against the equity capital of Rs.378 lacs. The joint
\n\tmeeting was convened on 4.10.1990 by Chief Secretary, Gujarat
\n\tGovernment to plan rehabilitation of GHL whereat GIIC, Government of
\n\tGujarat, ITC and Financial Institutions took participation. Sick
\n\tIndustrial Companies (Special Provisions) Act, 1985 was in force but
\n\tit did not apply to GHL. The parties agreed to make following
\n\tsacrifices in Net Present Value terms.\n<\/p>\n
(1)<\/span><\/p>\n
\t   Financial Institutions = 83 lacs (they agreed to give one time
\n\tsettlement after reducing the rate of interest and forgoing the
\n\tpenal interest and liquidated damages).\n<\/p>\n
(2)<\/span><\/p>\n
\t  ITC = 126 lacs.\n<\/p>\n
(3)<\/span><\/p>\n
\t Government\/GIIC = 110 lacs.\n<\/p>\n
All
\n\tparties agreed that GHL must be revived without any further delay
\n\tand that all parties must contribute equitably for such a revival.
\n\tIt was also agreed that the above sacrifices will be brought about
\n\tthrough the concessions from each party. There may be changes in the
\n\texact nature of these concessions but the net present value of
\n\tsacrifices as indicated above will be protected. The State
\n\tGovernment thereafter passed a Resolution on 22.3.1991 agreeing the
\n\tdeferment (not exemption) of luxury tax, sales tax, electricity duty
\n\tand purchase tax without interest. The Government made sacrifices
\n\tonly in terms of interest.\n<\/p>\n
\tThe Government passed
\n\tanother Resolution on 10.9.1992 permitting ITC to run hotel and
\n\tavailed the same concession\/relief. This was required because ITC
\n\twas running the hotel as a licensee and, therefore, could not have
\n\tavailed of the benefits. On 30.3.1993 a newspaper item appeared
\n\treporting that Government was considering to withdraw the
\n\tconcessions. GHL therefore made a representation on 2.4.1993 to the
\n\tChief Minister of the State requesting him not to withdraw the
\n\tconcession.  No reply was received to this representation nor any
\n\thearing or opportunity to show cause was given against the
\n\twithdrawal of the concession. The Government thereafter raised
\n\tdemand for repayment of the luxury tax and threatened that it would
\n\tbe recovered as arrear of land revenue vide notices dated 23.6.1993,
\n\t24.6.1993 and 8.7.1993. All these resolutions and notices were
\n\tchallenged in Special Civil Application No.6896 of 1993.\n<\/p>\n
\tThe Government thereafter
\n\tpassed another Resolution on 11.11.1993 withdrawing the remaining
\n\tconcession, namely, sales tax, purchase tax and electricity duty.
\n\tThis Resolution was challenged in Special Civil Application No.13696
\n\tof 1993. As stated above, the Division Bench granted stay order in
\n\tLPA No.30 of 1993 on the ground that though there is no estoppel
\n\tagainst the statute time for payment of tax already realised could
\n\thave been granted under proviso to Section-8 of the Gujarat Luxury
\n\t(Hotels and Lodging Houses) Act, 1977. The learned Single Judge
\n\tgranted stay on 5.8.1994 in Special Civil Application No.13969 of
\n\t1993 on the ground that no reply to the petition has been filed
\n\tinspite of more than a dozen adjournments.\n<\/p>\n
\tThe only question which
\n\tis now to be decided in both these petitions is in respect of
\n\tinterest on deferred payment of luxury tax, sales tax, purchase tax
\n\tand electricity duty as by now all these amounts of tax have been
\n\tpaid by the petitioner.\n<\/p>\n
\tMr. S.N.Shelat, learned
\n\tSenior Counsel appearing with Mr. A.S. Asthavadi, learned advocate
\n\tfor the petitioners submitted that the Resolution dated 8.6.1993 and
\n\t11.11.1993 are required to be quashed and set aside and this Court
\n\tmay issue a writ of mandamus or any other direction directing the
\n\trespondents to comply with the Resolution dated 22.3.1991
\n\tincorporating the agreement between the parties arrived at the
\n\tmeeting held on 4.10.1990 presided over by the Chief Secretary,
\n\tGovernment of  Gujarat. He has further submitted that the
\n\trespondents are bound to abide by the promise, assurances and agreed
\n\tterms at the meeting held on 4.10.1990  ITC and financial
\n\tinstitutions have made their sacrifices agreed to at the meeting to
\n\tthe extent of (1) purchasing shares of the GIIC at Rs.12.50 (2)
\n\tagreed to pay its dues of Rs.78 lacs from GHL. ITC paid Rs.240 lacs
\n\tto GHL to repay the outstanding loans of financial institutions. ITC
\n\tpaid Rs.120 lacs rental for two years in advance in view of the
\n\toperating license agreement. He has further submitted that the
\n\tshareholders’ agreement between the parties reflects that the State
\n\tGovernment<\/p>\n
(i)
\n\t wanted to promote industries and tourism in the State of Gujarat by
\n\tproviding infrastructural facilities to the hotel at Vadodara.\n<\/p>\n
(ii)
\n\t  the control over the appointment of the Chairman and Board of
\n\tDirectors and nomination of Directors on the Board.\n<\/p>\n
(iii)
\n\t the affidavit filed by the State Government in Special Civil
\n\tApplication No.6869 dated 26.8.1996 expressly states that the
\n\tGovernment has accorded consent to GIIC on 21.9.1983 for promoting
\n\tGujarat Hotel Project at Vadodara (Gujarat Hotels Ltd.,) in joint
\n\tsector with ITC Group.  The Government, therefore, made effort to
\n\trehabilitate the hotel when it had become sick. He has further
\n\tsubmitted that the State Government is estopped from resiling on its
\n\tpromise by passing a Resolution dated 8.6.1993 and 11.11.1993 in
\n\tview of the fact that the impugned Resolutions are invalid in law as
\n\tno reasons are disclosed. The respondents cannot supplement the
\n\treasons in the affidavit in reply. The petitioners have altered
\n\ttheir position by making sacrifices and granting financial benefit
\n\tto the hotel as per the agreement arrived at between the parties.
\n\tThe agreement has created legal relationship between the parties. In
\n\tthe affidavit-in-reply dated 6.2.1996, 28.11.2006 and 20.12.2006 it
\n\tis contended on behalf of the respondents that statutory provisions
\n\tdo not permit grant of such benefit. However, this contention is
\n\twholly unjustified as provisions of Luxury Tax enable the State
\n\tGovernment to grant benefit if it is so inclined under Section-8A of
\n\tthe Act. The Collector is competent to record in writing and extend
\n\tthe date of payment. The Collector as an agent of the State
\n\tGovernment could have extended the date of payment of the Luxury Tax
\n\tand granted benefit of deferment of Luxury Tax as agreed to between
\n\tthe parties. Section-49 of the Sales Tax Act provides for grant of
\n\texemption. Section 3(2AAA)(a) provides exemption under the
\n\tprovisions of Electricity Duty Act, 1958.  The second contention
\n\traised is that there is a discriminatory treatment in favour of the
\n\tpetitioner. This ground is also not valid as there is no
\n\tdiscriminatory treatment. The State Government was inclined to
\n\tpromote hotel at Vadodara through the instrumentality of GIIC,
\n\tpetitioner and ITC. Promotion of hotel tourism is in the public
\n\tinterest.  Subsequently the State Government by Resolution dated
\n\t20.12.1995 has granted incentives and benefits to promote hotel
\n\tindustries. The State Government has subsequently enacted Act 2 of
\n\t1997 retrospectively to grant benefit of Luxury Tax pursuant to its
\n\t1995 Policy. The State Government has entered into legal
\n\trelationship between the parties and is bound to abide by the terms
\n\tof Agreement.\n<\/p>\n
\tThe reasoning that the
\n\tcontract is not executed is wholly unjustified in view of the
\n\tdecision of the Apex Court. In the case  of  GSFC Vs. Lotus
\n\tHotel Ltd., AIR 1983 (SC) 848,
\n\tthe Apex Court approved the decision of the High Court. In this
\n\tcase, the GSFC entered into agreement in performance of its
\n\tstatutory duty to advance loan to a Company. Acting on such
\n\tundertaking the Company proceeded to undertake and execute project
\n\tof setting up a four star hotel. The Company incurred huge expenses
\n\tand suffered liabilities to set up hotel. The Court held that the
\n\tprinciple of promissory estoppal would certainly estop the
\n\tCorporation from backing out of its obligation arising from a solemn
\n\tpromise made by it to the respondent Company. In the case of  State
\n\tof Punjab Vs. Nestle India, 2004 Judgment Today (Supple.) Vol.2 SC
\n\t283,
\n\tthe Government was held to be equally susceptible to the operation
\n\tof the doctrine in whatever area or field the promise is made,
\n\tcontractual, administrative or statutory. The Court further held
\n\tthat,  “the doctrine of promissory estoppel would undoubtedly
\n\tbe applicable where an entrepreneur alters his position pursuant to
\n\tor in furtherance of the promise made by a State to grant inter alia
\n\texemption from payment of taxes or charges on the basis of the
\n\tcurrent tariff. Such a policy decision on the part of the State
\n\tshall not only be expressed by reason of notifications issued under
\n\tthe statutory provisions but also under the executive instructions .
\n\tIn the case of  Mahabir Vegetables Oil Vs. State
\n\tof Haryana, 2006 Vol.3 Judgment Today 544,
\n\tit is held that it is a fundamental rule of law that no statute
\n\tshall be construed to have a retrospective operation unless such a
\n\tconstruction appears very clearly in the terms of the act or arises
\n\tby necessary and distinct implication. A retrospective effect to an
\n\tamendment by way of a delegated legislation could be given, thus,
\n\tonly after coming into force of sub-section (2A) of Section 64 of
\n\tthe Act and not prior thereto. Although there lies a distinction
\n\tbetween vested rights and accrued rights as by reason of a delegated
\n\tlegislation, a right cannot be taken away. The amendments carried
\n\tout in 1996 as also the subsequent amendments made prior to 2001,
\n\tcould not, thus, have taken away the rights of the appellant with
\n\tretrospective effect. Reliance is also placed on the decision of the
\n\tApex Court in the case of  U.P.Power Corporation
\n\tVs. Sant Steel & Alloys (P) Ltd., & Ors, AIR 2008 SC 693.
\n\tIn the case of  State of Bihar Vs. Kalyanpur
\n\tCements Ltd., Judgment Today 2010 (1) SC 225
\n\tthe Apex Court after having considered all the decision has
\n\treiterated that the State is bound by the promise.\n<\/p>\n
\tIn
\n\t Kishorkumar Prabhudas Tanna & Anr. Vs. State
\n\tof Gujarat through Secretary & Ors., reported in 2009 (1) GLR
\n\t683,
\n\tthe Division Bench of this Court has held that there is no quarrel
\n\twith the submission that if the statute empowers the Government to
\n\texercise discretion for grant of the benefit of exemption, the same
\n\tpowers can be resorted to for withdrawal of those exemptions also.
\n\tHowever, once such a benefit has been extended in exercise of
\n\tstatutory power like Sec.49(2) of the Sales Tax Act, granting the
\n\tbenefit of exemption for the period from 1.12.2005 to 30.11.2008,
\n\tthere has to be justification for rescinding or withdrawing such
\n\tbenefit of exemption.  There is no justification or public interest
\n\texplained. The Court further held that when there is no explanation
\n\tor justification for rescinding the benefit of exemption granted
\n\tearlier for a period from 1.12.2005 to 30.11.2008 before the expiry
\n\tis coming forth, then, it would certainly attract the doctrine of
\n\tpromissory estoppel irrespective of the fact that it has been
\n\trescinded in exercise of the same statutory power under the Sales
\n\tTax Act. The Court further held that even if the Sales Tax Act has
\n\tbeen repealed, the benefit granted under the erstwhile Sales Tax Act
\n\tfor the exemption by notification which was to remain valid from
\n\t1.12.2005 to 30.11.2008 could have continued or remained and it is
\n\tonly for taking care of such eventualities Section-100 of the V.A.T.
\n\tAct providing for repeal and saving clause has been made which takes
\n\tcare of such situation.\n<\/p>\n
\t In
\n\t Express Newspapers Pvt. Ltd. and others vs.
\n\tUnion of India and others<\/a>, (1986) 1 SCC 133
\n\tthe Apex Court held that it  would appear that Denning, J. evoked
\n\ttwo doctrines : (1) that assurances intended to be acted upon and in
\n\tfact acted upon were binding; and (2) that where a Government
\n\tdepartment wrongfully assumes authority to perform some legal act,
\n\tthe citizen is entitled to assume that it has that authority, and he
\n\tdismissed the contention that estoppels do not bind the Crown by
\n\tsaying that ‘that doctrine has long been exploded’ and that the
\n\tCrown cannot fetter its future executive action. Professor Wade
\n\tpoints out that the proposition about wrongful assumption of
\n\tauthority evoked by Denning, J. was immediately repudiated by the
\n\tHouse of Lords in a later case in which Denning, LJ. had again put
\n\tit forward in Howell v. Falmouth Boat Construction Company Ltd.,
\n\tL.R. [1951] AC 837, it is beyond the scope of this judgment to enter
\n\tinto a discussion as to how far Denning, J.’s dictum can still be
\n\tregarded as part of the common law in England. But there appears to
\n\tbe a school of thought in India laying down that the doctrine of
\n\tpromissory estoppel applies to the Government except under certain
\n\tcircumstances.\n<\/p>\n
\tMr.Shelat alternatively
\n\tsubmitted that the petitioners are entitled to the benefit of the
\n\tResolution dated 22.3.1991 till the communication dated 8.6.1993
\n\t(Luxury Tax) and dated 11.11.1993 (Sales Tax, Purchase Tax,
\n\tElectricity Duty). He has further submitted that the petitioners
\n\thave as per the agreement between the parties complied with the
\n\tpayment of deferred taxes and paid –\n<\/p>\n
(i)
\n\t deferred Sales Tax during 29.5.1995 to 2.9.1998.\n<\/p>\n
(ii)
\n\tdeferred Electricity Duty from 10.5.1995 to 8.10.1998.\n<\/p>\n
(iii)
\n\tdeferred Luxury Tax from 4.5.1995 to 3.10.1998.\n<\/p>\n
 In
\n\tview of the above averments Mr.Shelat submitted that the petitions
\n\tare required to be allowed and rule be made absolute accordingly.\n<\/p>\n
\tMr. P. K. Jani, learned
\n\tGovernment Pleader appearing on behalf of the respondents has
\n\tsubmitted that the petitioners are not entitled to the reliefs
\n\tprayed for in any of these two petitions inasmuchas the decision of
\n\tthe Government in the matter regarding withdrawal of concession of
\n\tdeferment of Luxury Tax has been taken by the Government after due
\n\tdeliberation and proper application of mind and the said policy
\n\tdecision is in confirmity with the requirement of the Gujarat Tax on
\n\tLuxuries (Hotels and Lodging Houses) Act, 1977.  He has further
\n\tsubmitted that by the Government Resolution dated 8.6.1993 the State
\n\tGovernment has corrected its mistake which it had committed while
\n\tgranting a package of concessions to the petitioner No.1. He has
\n\tfurther submitted that only deferment of luxury tax which was
\n\tgranted vide Government Resolution dated 22.3.1991 has been
\n\twithdrawn out of the package of concessions granted to the
\n\tpetitioner No.1 and subsequently extended to the petitioner No.3.
\n\tThe Government realised that the Government resolution dated
\n\t22.3.1991 which granted deferment of luxury tax to the petitioners
\n\tis prohibited by statute, that is, the Act herein and the same is
\n\tagainst a public policy, inasmuch as the State Government could not
\n\thave granted such deferment to the petitioners in view of the
\n\tprovisions of the Act. He has further submitted that Section-3 of
\n\tthe Act deals with the levy and collection of the luxury tax. In
\n\tview of Section-3 the Government is empowered to recover luxury tax,
\n\tfor the luxury provided in a hotel and the said luxury tax which is
\n\tcollected by the proprietor of the hotel has to be paid into the
\n\tGovernment Treasury within the time and in the manner provided in
\n\tthe Act. The petitioner No.1 has collected luxury tax from its
\n\tclients but has not paid the same into the Government Treasury. In
\n\tview of the provisions of the Act, it is incumbent on the Government
\n\tto recover the said amount of luxury tax from the petitioners, which
\n\tthe petitioners have already recovered from their customers\/clients.
\n\t Since the promise\/agreement which was made in Government Resolution
\n\tdated 22.3.1991 is prohibited by the Statute and is consequently
\n\tagainst public policy, the same cannot be enforced in Court of law.
\n\tThe tax which is validly levied under the Act and which is collected
\n\tby the petitioners has to be paid into the Government Treasury as
\n\trequired under the Act. Since the Government realised its mistake,
\n\tit has by Government Resolution dated 8.3.1993 withdrawn concession
\n\twith regard to the deferment of Luxury tax.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat the petitioners are required to pay after Government Resolution
\n\tdated 22.3.1991. that is, for the period of April, 1991 to June,
\n\t1993 an amount of Rs.67.35 lacs approximately by way of luxury tax
\n\tinto the Government Treasury. He has further submitted that mere
\n\tfact of grant of initial exemption and subsequent revocation thereof
\n\tis not sufficient to attract the doctrine of promissory estoppel as
\n\twell as the doctrine of legitimate expectation inasmuch as no
\n\tpromise or agreement which is prohibited by statute can be enforced
\n\tin a Court of law. He has further submitted that the doctrine of
\n\tpromissory estoppel is not attracted in the sphere of statutory
\n\tpower. In the present case the Act requires collection of luxury tax
\n\tto be paid into the Government Treasury and if the same is not done
\n\tas required under the Act the same would be contrary to the
\n\tprovisions of the Act and consequently illegal. He has submitted
\n\tthat very foundation of deferment of luxury tax is contrary to the
\n\tprovisions of the Act and is consequently contrary to the Act and,
\n\ttherefore, doctrine of promissory estoppel cannot be attracted in
\n\tthis case.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat there is no question of the petitioner altering his position
\n\tinasmuch as the petitioner No.1  existed prior to the concession of
\n\tdeferment of luxury tax.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat pursuant to the order passed by this Court on 18.1.2007
\n\tAdditional Affidavit was filed by Shri Pankaj Kumar, Information &
\n\tBroadcasting Department, Government of Gujarat wherein it is clearly
\n\tstated that 1995 Scheme had nothing to do with individual benefits
\n\textended to the petitioners in the year 1991. It was benefit of
\n\tdeferment from various taxes which was extended to the petitioners
\n\tin contradiction with the benefit relating to exemption from taxes
\n\twhich was available under 1995 Scheme called  New Package Scheme
\n\tof Incentives for Tourism Projects, 1995-2000  declared in the
\n\tyear 1995 and made effective from 1.8.1995 vide Government
\n\tResolution dated 20.12.1995. He has further submitted that when the
\n\tpolicy underlying the 1995 Scheme being in contemplation necessary
\n\tsteps were taken on 13.2.1995 by way of pre-budget discussion with
\n\tthe Finance Department to give effect to the benefit of exemption
\n\tfrom luxury tax under the applicable legislation. In furtherance
\n\tthereof, process of preparing draft ordinance for amending the
\n\tprovisions of the Gujarat Tax on Luxuries (Hotels and Lodging
\n\tHouses) Act, 1977 was commenced, so as to bring the same in
\n\tconsonance with the spirit of the Tourism Scheme of 1995 after
\n\tfollowing due procedure which included consultation with the
\n\tconcerned departments like Finance Department and Legislative and
\n\tParliamentary Affairs Department. The ordinance was promulgated with
\n\tthe sanction of the Governor on 18.6.1996.  Thereafter, the proposed
\n\tamendment in the provisions of the Gujarat Tax on Luxuries (Hotels
\n\tand Lodging Houses) Act, 1977 came to be effected by inserting
\n\tSection-20B which received the assent of the Governor on 26.2.1997
\n\tand the same was given retrospective effect from 18.6.1996.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat while declaring the assurances pursuant to the 1995 Scheme with
\n\treference to the benefit of exemption from luxury tax, consequential
\n\tcorresponding amendments in the provisions of the above referred Act
\n\twere very much under process. It is under these circumstances, that
\n\tthe erstwhile Information, Broadcasting and Tourism Department
\n\tissued a Notification dated 14.2.1997 providing inter alia that the
\n\teffective date of exemption from the payment of luxury tax under the
\n\t1995 Scheme would be the date mentioned in the eligibility
\n\tcertificate issued by the appropriate authority under the 1995
\n\tScheme.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat affidavit-in-reply was filed on behalf of the respondent No.3
\n\ton 10.2.2006 wherein it is inter alia stated that Gujarat Industrial
\n\tInvestment Corporation Ltd., had disinvested its total shareholding
\n\tin the year 1988-89 in favour of its Joint Sector partner ITC Ltd.,
\n\tand since then the respondent No.3 has no interest of whatsoever
\n\tnature in the petitioner No.1 Company. For remaining averments
\n\treliance was placed on the affidavit-in-reply filed on behalf of the
\n\trespondent No.5.\n<\/p>\n
\tMr.Jani further submitted
\n\tthat Additional Affidavit was filed on behalf of the respondent No.2
\n\ton 28.11.2006 wherein entire circumstances granting of deferment of
\n\tpayment of taxes as well as subsequent withdrawal were explained. It
\n\tis stated therein that since the benefits granted to the petitioner
\n\twere not supported by the provisions of law and also same being
\n\tdiscriminatory against other similarly situated hotels, the decision
\n\twas taken to withdraw concession. It is further stated that the
\n\tpetitioner was supposed to pay respective tax as per the assessment
\n\tand within the period prescribed. Since the petitioner has not paid
\n\tthe tax, the State Government is entitled to claim interest on such
\n\tamount as the petitioner when charged their customers with all these
\n\ttaxes at the relevant point of time recovered the said amount, has
\n\tutilized for its own purposes and, therefore, the petitioner is
\n\tliable to pay interest on the said amount. It is further stated that
\n\tthe action of the State Government is neither discriminatory nor
\n\tdoes it cause any undue hardship to the petitioner as the petitioner
\n\tfrom its customers has charged various taxes for which deferment was
\n\tgranted and, therefore, amount thus collected was with the
\n\tpetitioner Company. It is further stated that the petitioner Company
\n\twent into operation much before 1995-2000 Policy Tourism and hence
\n\tthe petitioner Company is not eligible for any benefit of that
\n\tScheme.\n<\/p>\n
\tIn support of his
\n\tsubmission Mr.Jani relied on the decision of  Kasinka Trading
\n\tand Anr. Vs. Union of India and Anr, reported in AIR 1995 SC 874,
\n\tthe Apex Court has held that; Where with a view to equalising sale
\n\tprices of the indigenous and the imported material and to make the
\n\tcommodity available to the consumer at a uniform price, keeping in
\n\tview the trends in the supply of the material, the exemption
\n\tNotification No. 66 of 1979 was issued under Section 25(1) of the
\n\tAct, however subsequently, when it was found and realised that the
\n\tinternational prices of the product were falling and consequently
\n\tthe import prices had become lower than the exfactory prices of the
\n\tindigenous material, the matter was examined by the Government  of
\n\tIndia and it was decided in “public interest” to withdraw
\n\tthe exemption Notification, the action of Govt. in withdrawing the
\n\tearlier exemption notification cannot be challenged on ground of
\n\tpromissory estoppel. The exemption Notification issued under Section
\n\t25(1) of the Act, in “public interest”, was designed to
\n\toffset the excess price which the local entrepreneurs were required
\n\tto pay for importing PVC resin at a time when the difference between
\n\tthe indigenous product and the imported product was substantial. No
\n\timporter could be expected to import PVC resins after paying duty
\n\tand incur losses. The exemption Notification, was therefore, issued
\n\twith a view to offset those losses to the extent possible. The
\n\texemption Notification was not issued as a potential source of extra
\n\tprofit for the importer. Again at the time when the Notification was
\n\twithdrawn by the  Government  there was no scope for any loss to be
\n\tsuffered by the importers. The exemption Notification did not hold
\n\tout to the appellants any enforceable promise. Moreover, the
\n\tNotification cannot be said to have extended any “representation”
\n\tmuch less a “promise”  to a party getting the benefit of
\n\tit to enable, to invoke the doctrine of promissory estoppel against
\n\tthe State. A Notification issued under Section 25 of the Act cannot
\n\tbe said to be holding out of any such unequivocal promise by the
\n\tGovernment which was intended to create any legal relationship
\n\tbetween the Government and the party drawing benefit flowing from
\n\tthe said Notification. It cannot, therefore be said that even if the
\n\tpublic interest so demanded and the Central Government was satisfied
\n\tany further, it could still not withdraw the exemption. In such a
\n\tcase, merely by mentioning the date as 31st March, 1981, as the date
\n\t up to which the exemption  Notification was to be operative, no
\n\tunequivocal representation could be said to have been made that it
\n\tcould not be rescinded or modified before that date even if the
\n\tGovernment was satisfied that it was necessary in the public
\n\tinterest to rescind it. Since, the Notification had been issued
\n\tunder Section 25(1) of the Act, the very same power was available to
\n\tthe authority for rescinding or modifying that Notification and the
\n\tdealer ought to have known that the said Notification was capable of
\n\tor liable to be revoked, modified or rescinded at any time even
\n\tbefore the expiry of 31st March if the `public interest’ so
\n\tdemanded. Moreover, it was not permissible to postpone the
\n\tcompulsions of “public interest” till after 31st March,
\n\t1981 if the Government is satisfied as to the change in the
\n\tcircumstances before that date.\n<\/p>\n
\tIn
\n\t Sales Tax Officer and Anr. Vs. Shree Durga Oil
\n\tMills And Anr., reported in (1998) 1 SCC 572,
\n\tthe Apex Court held that Industrial Policy Resolution (IPR) can be
\n\tchanged if there is an overriding public interest involved. In the
\n\tinstant case, it has been stated on behalf of the State that various
\n\tnotifications granting sales tax exemptions to the dealers resulted
\n\tin severe resource crunch. On reconsideration of the financial
\n\tposition, it was decided to limit the scope of the earlier exemption
\n\tnotifications issued under Section-6 of the Orissa Sales Tax Act.
\n\tBecause of this new perception of the economic scenarios of the
\n\tState, the scope of the earlier notifications had to be restricted.
\n\tWithdrawal of notification was done in public interest. Public
\n\tinterest must override any consideration of private loss or gain.
\n\tThus the plea of change of policy of trade on the basis of resource
\n\tcrunch should have been sufficient for dismissing the respondent’s
\n\tcase based on the doctrine of promissory estoppel.\n<\/p>\n
\tIn
\n\t M.P.Mathur & Ors. Vs. D.T.C. & Ors.,
\n\treported in AIR 2007 SC 414,
\n\tthe Apex Court held that The promissory estoppel is based on equity
\n\tor obligations. It is not based on vested right. In equity the Court
\n\thas to strike a balance between individual rights on one hand and
\n\tthe larger public interest on the other hand. Freedom to contract is
\n\ta common law civil liberty enjoyed by all persons. But when the
\n\tgovernment is contracting with private parties this common law
\n\tfreedom is circumscribed by the principles of administrative law
\n\twhich requires larger public interest to be taken into account. Even
\n\tapplying the principles enshrined in Article 39 (b) and (c) of the
\n\tConstitution, egalitarian quality requires the Government to strike
\n\ta balance between competing claims. Even in the realm of social
\n\tjustice, on which the Constitution is founded, the administration
\n\thas to strike a balance between the competing claims.\n<\/p>\n
\tHaving
\n\theard the learned Senior Counsel Mr. S.N.Shelat for the petitioners
\n\tand Mr.P.K. Jani, the learned Government Pleader for the respondents
\n\tand having considered their rival submissions in light of the
\n\tGovernment Resolutions dated 22.3.1991 and 10.9.1992 granting
\n\tbenefit of deferred payment of Luxury Tax, electricity duty,
\n\tSales-tax and purchase-tax for the period of four years from 1991 to
\n\t1994 and withdrawal thereof by subsequent Government Resolutions
\n\tdated 8.6.1993 and 11.11.1993 and having further considered the
\n\tvalidity of the State Government’s action of withdrawal of benefit
\n\tof deferred payment of taxes in light of the principle of estoppal
\n\tas propounded by the Courts and the relevant statutory provisions
\n\tcontained in the Gujarat Tax on Luxuries (Hotels & Lodging
\n\tHouses) Act, 1977, Bombay Electricity Duty Act, 1958 and the Gujarat
\n\tSales Tax Act, 1969, the Court is of the view that so far as the tax
\n\tbenefit of deferred payment of luxury tax is concerned, the Division
\n\tBench of this Court, while disposing off the Letters Patent Appeal
\n\tNo.30 of 1994 on 2.2.1994, had already expressed prima facie opinion
\n\tthat under proviso to Section-8 of the Act, time for payment of tax
\n\talready realised could be extended. Therefore, the action of the
\n\tState Government in deferring payment would not be contrary to law.
\n\tThus prim facie opinion will have to be taken into consideration
\n\twhile disposing off these petitions finally. The question of payment
\n\tof interest, if any, also assumes significance.\n<\/p>\n
\tSo
\n\tfar as Special Civil Application No.13969
\n\tof 1993 is concerned, this Court has admitted
\n\tthe petition and continued the interim relief till further order
\n\tonly because despite more than a dozen adjournments and despite very
\n\thuge amount was involved, the State
\n\tGovernment had not made its stand clear nor filed any affidavit. The
\n\tCourt, therefore, observed in its order dated 5.8.1994 that the stay
\n\tof recovery of a huge amount approximately Rs.300 lakhs has
\n\tcontinued because of the passive attitude of the Government. This
\n\tpassive attitude on the part of the Government has to be broken and
\n\tthe Government must come out from the slumber to take appropriate
\n\taction\/decision at appropriate time.\n<\/p>\n
\t Be
\n\tthat as it may, since the deferred payment of luxury tax,
\n\telectricity duty and sales-tax has been made by the petitioners as
\n\tper the terms of the resolutions granting such benefit, the question
\n\tof further payment survives
\n\tqua the interest only.\n<\/p>\n
\t The starting point of
\n\tthe entire controversy is the meeting held on 4.10.1990 and the
\n\tminutes drawn thereat. The financial institutions, Government of
\n\tGujarat, GIIC and ITC decided to revive Gujarat Hotels Ltd., and to
\n\tmake their respective sacrifices for such revival.  The State
\n\tGovernment undertook to sacrifice by offering concessions of (a)
\n\tdeferment of Luxury tax for four years (b) deferment of Sales-tax
\n\tfor four years (c) deferment of Purchase-tax (State Sales Tax on
\n\tinput purchases for four years and (d) deferment of electricity duty
\n\tfor four years. The total quantum of these deferred taxes were to be
\n\trepaid in four annual installments beginning from 1995-96.\n<\/p>\n
\t  Pursuant to the minutes
\n\tof the meeting, a Government Resolution was passed on 22.3.1991.
\n\tThis Resolution states as under:-\n<\/p>\n
\t\t After
\n\t\tcareful consideration, Government is pleased to
\n\t\textend the following concessions as a part of the rehabilitation
\n\t\tplan to the Gujarat Hotels Ltd., for a period of four years from
\n\t\t1991-92 (i.e. from 1991-92 to 1994-95).\n<\/p>\n
\t\t(1)   Deferment of
\n\t\tpurchase-tax by way of interest free loan through GIIC for an
\n\t\tequivalent amount of sales-tax paid by the company for purchase of
\n\t\traw materials etc. This loan will be disbursed by the GIIC and GIIC
\n\t\tis authorized to make such disbursement on behalf of State
\n\t\tGovernment.\n<\/p>\n
\t\t(2)  Deferment of
\n\t\tElectricity Duty.\n<\/p>\n
\t\t(3)  Deferment of
\n\t\tsales-tax.\n<\/p>\n
\t\t(4)  Deferment of luxury
\n\t\ttax.\n<\/p>\n
\t The Government of
\n\tGujarat, thereafter passed another Resolution on 10.9.1992
\n\tclarifying that as a part of the rehabilitation plan, it had granted
\n\tits consent to the proposal of GIIC Ltd., to permit ITC Ltd., to run
\n\tthe Gujarat Hotel Ltd., on a license basis. Accordingly, ITC was to
\n\ttake GHL on an operating license\/lease initially for a period of 30
\n\tyears and to pay a minimum lease rental of Rs.60 lakhs.  It was
\n\tfurther clarified that both ITC Ltd., GHL was jointly and severally
\n\tliable for the repayment of taxes to the Government after the period
\n\tof deferment as specified in the Government Resolution of 22.3.1991
\n\twas over.\n<\/p>\n
\t Before the period of
\n\tfour years for deferred payment of Luxury taxes expired the State
\n\tGovernment passed a Resolution dated 8.6.1993 withdrawing concession
\n\tof deferred payment of Luxury tax granted to GHL and extended to
\n\tITC.  Similar Resolution was passed on 11.11.1993 withdrawing
\n\tconcession of deferred payment of Sales-tax, purchase tax and
\n\telectricity duty. The petitioner Nos.1 and 3 i.e. GHL and ITC Ltd.,
\n\twere directed to pay the amount of taxes in question within 30 days
\n\tof the issue of the respective Government Resolution.  Though no
\n\treasons are given for withdrawal of such concessions, in the
\n\taffidavit in reply, it is conveyed that grant of concessions was
\n\tmerely a mistake.  The State Government has no power to grant such
\n\tconcessions and it would amount to show some favour to the
\n\tpetitioners.\n<\/p>\n
\t To consider this
\n\treasoning, it is necessary to have a close look at the statutory
\n\tprovisions. The Gujarat Tax on Luxuries (Hotels and Lodging Houses)
\n\tAct, 1977 is enacted to provide for the levy and collection of a tax
\n\ton luxuries provided in hotels and lodging houses and for matters
\n\tconnected, therewith. Section 2(b) defines ‘Collector’ who includes
\n\tany officer appointed by the State Government to exercise the powers
\n\tand perform the functions of the Collector under this Act. Section-3
\n\tdeals with levy and collection of luxury tax. Sub-section 3 of
\n\tSection-3 states that the tax payable under this Section shall be
\n\tcollected by the proprietor and be paid a Government treasury within
\n\tthe time and in the manner provided in the Act. Section-6 deals with
\n\tassessment and collection of tax and Section-7 discusses about the
\n\timposition of penalty in certain cases. Section-7A talks of
\n\tliability of proprietor to pay interest. Section-8(1) says that the
\n\tamount of tax, penalty and interest, if any, shall be paid by the
\n\tproprietor liable therefore into a Government treasury by such date
\n\tas may be specified in the notice issued by the Collector for this
\n\tpurpose, being a date not earlier than thirty days from the date of
\n\tservice of notice. However. The proviso to Section-8(1) is very
\n\timportant.  It says that the Collector or the appellate authority in
\n\tan Appeal under Section-9 may, in respect of any particular
\n\tproprietor and for reasons to be recorded in writing, extend the
\n\tdate of payment, or allow him to pay the tax, penalty or interest,
\n\tif any, by installments.  Thus, by virtue of this proviso, powers
\n\tare conferred on the Collector as well as appellate authority to
\n\tgrant an extension of time in making payment of tax, penalty or
\n\tinterest, if any.  The deferment of payment in nothing but an
\n\textension of time in making payment. When officers appointed by the
\n\tState Government are having powers under the Act to grant extension
\n\tof time in making payment of taxes, the State Government can
\n\tcertainly have such powers and such powers can be exercised by the
\n\tState Government even prior to the machinaries or procedure
\n\tprescribed in the Act are put into motion.\n<\/p>\n
\t  Similarly, Section-47
\n\tof Gujarat Sales Tax Act, 1969 deals with payment of tax and
\n\tdeferred payment of tax etc. Sub Section-4 of Section-47 says that
\n\tthe amount of tax, penalty or interest, if any shall be paid by the
\n\tdealer or the person liable therefore into a Government treasury by
\n\tsuch date as may be specified in a notice issued by the Commissioner
\n\tfor this purpose, being a date not earlier than ten days from the
\n\tdate of service of the notice. Here also, two proviso are very
\n\timportant. The first proviso states that the Commissioner or an
\n\tappellate authority in an Appeal under Section-65 may, in respect of
\n\tany particular dealer or person, and for reasons to be recorded in
\n\twriting, extend the date of payment, or allow him to pay the tax or
\n\tpenalty (if any) by installments. The second proviso starts with
\n\tnon-obstantie clause. It states that notwithstanding anything
\n\tcontained in this Act or in the rules made thereunder but subject to
\n\tsuch conditions as the State Government or the Commissioner may by
\n\tgeneral or special order specify, where a dealer to whom incentives
\n\tby way of deferment of sales tax or purchase tax or both have been
\n\tgranted by virtue of an eligibility certificate granted by the
\n\tCommissioner of industries, Gujarat State or any Officer authorized
\n\tby him in this behalf and where a loan liability equal to the amount
\n\tof any such tax payable by such dealer has been raised by the
\n\tGujarat Industrial Investment Corporation Ltd., or Gujarat State
\n\tFinancial Corporation Ltd., then such tax shall be deemed, in the
\n\tpublic interest, to have been paid.  Thus, the State Government is
\n\twell within its competence to grant deferment of Sales-tax and
\n\tPurchase-tax.\n<\/p>\n
\t The case of deferment of
\n\telectricity is however, somewhat different. Section-4 of the Bombay
\n\tElectricity Duty Act, 1958 deals with payment of electricity duty.
\n\tSub Section-1 of Section-4 states that every licensee shall collect
\n\tand pay to the State Government at the time and in the manner
\n\tprescribed, the proper electricity duty payable under this Act, in
\n\trespect of energy supplied by him to consumers. The duty so payable
\n\tshall be a first charge on the amount recoverable by the licensee
\n\tfor the energy supplied by him and shall be a debt due by him to the
\n\tState Government. It is true that Sub Section-3A of Section-4
\n\tempowers the State Government or an officer authorized by the State
\n\tGovernment in this behalf, in respect of any consumer to extend the
\n\tdate of payment or allow him to pay electricity duty by installments
\n\tin such manner and on such conditions as may be prescribed and allow
\n\tdeferment of payment of electricity duty under such circumstances,
\n\ton such conditions and for such period not exceeding five years in
\n\taggregate, if deferment is allowed for hundred per cent of the
\n\tpayment liability of electricity duty and not exceeding seven years
\n\tin aggregate, if deferment is allowed for fifty per cent of the
\n\tpayment liability of electricity duty, as may be prescribed.
\n\tHowever, Sub Section-3A is brought on the Statute book with effect
\n\tfrom 1.4.1999. Hence on the date when such concession was granted
\n\tthe power of deferment of electricity duty was not vested in the
\n\tState Government.  Even the provisions of Section-3(2AAA) of the Act
\n\twould not make any difference as by virtue of this sub-section, only
\n\tthose powers are saved which are already in existence.\n<\/p>\n
\t  In view of the above
\n\tdiscussion, the whole question of deferment of payment of taxes is
\n\tto be addressed from two different view points (1) if the powers are
\n\tthere and initially deferment is granted for four years and before
\n\tthe expiry of this period, deferment is withdrawn, and (2) if the
\n\tpowers are not there and yet deferment is granted for four years and
\n\tbefore expiry of this period, deferment is withdrawn.  The deferment
\n\tof luxury tax and sales-tax falls in the first category, whereas
\n\tdeferment of electricity duty falls in the second category.\n<\/p>\n
\t In view of the settled
\n\tlegal position, the principle of estoppal can certainly be invoked
\n\tby the petitioners so far as withdrawal of concessions of deferment
\n\tof sales-tax, purchase tax and luxury tax is concerned. Under the
\n\trespective statute, the State Government is vested with such powers
\n\tand by exercising such powers, concession of deferment of payment
\n\tfor four years was granted. Such concession was in the nature of
\n\tsacrifice undertaken and assured by the State Government.  The
\n\tFinancial Institutions and ITC have also made their sacrifices.  It
\n\tis, therefore, not open for the State Government to withdraw such
\n\tconcession before the expiry of four years. The Government
\n\tResolution dated 8.6.1993 withdrawing the concession of deferment of
\n\tluxury tax is therefore quashed and set aside. Since the entire
\n\tamount of luxury tax has been paid by the petitioners within time,
\n\tthere is no question of charging any interest. Similarly on the same
\n\tparity of reasoning, the Government Resolution dated 11.11.1993 in
\n\tso far as it relates to sales-tax and purchase-tax, is hereby
\n\tquashed and set aside. Since the entire amount of deferred sales-tax
\n\thas been paid within time, there is no question of charging any
\n\tinterest.\n<\/p>\n
\t  So far as deferred
\n\tpayment of electricity duty is concerned, despite there being no
\n\tpower, such deferment is granted. However, the petitioners cannot be
\n\tsaddled with any liability till the date of withdrawal of such
\n\tdeferment. Thus, the petitioners are not liable to pay any interest
\n\ton the outstanding payment of electricity duty till 11.11.1993.  The
\n\tpetitioners Nos.1 and 3 are, therefore, held to be liable to pay
\n\tinterest at the applicable rate on the outstanding amount of
\n\telectricity duty, commencing from 11.11.1993 till the date of actual
\n\tpayment.\n<\/p>\n
\t The above view taken by
\n\tthis Court in respect of electricity duty is duly supported by the
\n\tdecision of the Apex Court in  U.P.  Power
\n\tCorporation Ltd., & Anr., Vs. Sant Steels & Alloys (P) Ltd.,
\n\t(Supra), wherein, in somewhat similar circumstances,
\n\tthe Court held that since such benefits have not been recognized by
\n\tthe Act of 1999, upto the date of coming into force of the Act of
\n\t1999, all the benefits which were being given to the respondent
\n\tentrepreneurs shall be protected by invoking the principle of
\n\tpromissory estoppal, but after coming into force of the Act of 1999
\n\twhich is a primary legislation enacted by the State legislature the
\n\tbenefits from the date of the Act has come into force, cannot be
\n\tmade available to the respondents.\n<\/p>\n
\t In the result, Special
\n\tCivil Application No.6896 of 1993 is allowed and rule made absolute,
\n\twhereas Special Civil Application No.13969 of 1993 is partly allowed
\n\tand rule made absolute to the above extent. There shall be no order
\n\tas to costs.\n<\/p>\n
\t\t\t\t\t\t\t     (K. A. PUJ,
\nJ.)<\/p>\n
kks<\/p>\n
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Gujarat High Court Gujarat vs State on 14 June, 2010 Author: K.A.Puj,&Nbsp; Gujarat High Court Case Information System Print SCA\/6896\/1993 51\/ 53 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6896 of 1993 With SPECIAL CIVIL APPLICATION No. 13969 of 1993 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ ========================================================= 1 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,8],"tags":[],"class_list":["post-122908","post","type-post","status-publish","format-standard","hentry","category-gujarat-high-court","category-high-court"],"yoast_head":"\nGujarat vs State on 14 June, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/gujarat-vs-state-on-14-june-2010-3\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gujarat vs State on 14 June, 2010 - 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